By Pfizer, the pharmaceutical giant, experienced a significant blow as its stock hit a 10-year low on Wednesday. The company’s downward revision of its 2024 guidance, coupled with lower-than-expected earnings and revenue projections, sent shockwaves through the market. However, amidst the disappointment, Pfizer aims to boost its cost-saving targets.
Earnings and Revenue Projections Fall Short
Pfizer’s adjusted earnings per share for 2024 are now expected to range from $2.05 to $2.25. Unfortunately, this falls below analysts’ consensus estimate of $3.16 per share, according to a FactSet poll. Furthermore, revenue projections for 2024, including the anticipated contribution from Seagen, a cancer-focused company acquired by Pfizer for $43 billion, hover between $58.5 billion and $61.5 billion. Analysts had previously forecasted 2024 revenue to be $62.66 billion.
Stock Decline and Long-Term Consequences
Following the revised guidance, Pfizer shares plummeted by 9.5% and closed at $25.87, reaching their lowest level since May 31, 2013. This sharp decline also marks the largest percentage drop in over a decade – since January 26, 2009, when shares fell by 10.3%, according to Dow Jones Market Data. Despite this setback, Pfizer’s CEO, Albert Bourla, emphasized the resilience of the company’s product portfolio.
Cost Realignment and Recovery Efforts
Albert Bourla expressed optimism in Pfizer’s cost realignment program, which strives to achieve savings of at least $4 billion by the end of 2024. This program aims to restore operating margins comparable to pre-pandemic levels.
To bolster their outlook, Pfizer increased its cost-saving target by $500 million from their previous guidance provided in August. The company envisions Comirnaty and Paxlovid, its treatments for Covid, generating $8 billion in revenue in 2024. Additionally, they anticipate an 8% to 10% growth in operating revenue from their combined Seagen and Pfizer portfolio of other products.
Future Growth Forecast
Excluding revenue from Comirnaty, Paxlovid, and the expected contribution from Seagen, Pfizer anticipates a more modest operating revenue growth of 3% to 5% for the full year of 2024.
While challenges lie ahead for Pfizer, the company remains determined to navigate the current market conditions and regain its footing.
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